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SIE practice questioneasyCommon Stock — Ex-Dividend Date

To receive a declared cash dividend, an investor must purchase the stock:

  1. AOn the record date
  2. BOn or after the ex-dividend date
  3. COn the payment date
  4. DBefore the ex-dividend date✓ Correct answer
Explanation

Why D — Before the ex-dividend date

To receive a dividend, an investor must purchase shares BEFORE the ex-dividend date (the ex-date). On the ex-date, the stock trades 'without' the dividend. The record date is when the company checks its books to see who is a shareholder, but due to settlement timing, you must buy before the ex-date to be recorded by the record date.

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